Returning To Sanity After A Bankruptcy

Bankruptcy is a heartbreaking procedure that affects thousands of Americans every year. Moving on from this procedure takes a lot of patience, hard work and a little guts. However, if you stick to this basic plan, you should get your life (and your sanity) back on track in no time.

Keep Paperwork

After you're done filing, make sure to hold on to your paperwork for the length of your bankruptcy. Why? Because if you have to refile at the end of your term, those papers can help you streamline the process and avoid a lot of agony down the road. Bankruptcy paperwork will also necessary when applying for loans.

Talk to Your Family

Talking to your family after a bankruptcy is one of the most important ways to move on from the process. Your family members may be confused and upset by the process, and may not understand what is going on. A simple family talk may be all you need to restore calm to your family.

Make a Budget

Bankruptcy is often a wake-up call for many families, telling them that they were living too high above their means. Make an easy budget by calculating household income, fixed expenses, variable expenses, and a savings goal.

Try to eliminate as many variable expenses as possible, such as eliminating Friday pizza night, and find cheaper alternatives for your fixed expenses, such as searching for cheaper car insurance.

Rebuild Your Credit

Once you've got a budget, it's time to rebuild your credit score. Many people are intimidated by this process, but it's not difficult. It just requires persistence and careful spending.

Ways that you can improve your credit after bankruptcy includes:

  • Tracking your credit score regularly
  • Opening a new bank account
  • Applying for a secured credit card
  • Purchasing and using gas or retail cards
  • Paying off your full credit balance every month

Slowly, but surely, your credit score should start to creep up to acceptable levels. Your bankruptcy will loom over it for years to come, but won't keep you in bad credit hell forever.

Reinvest by Taking Out a Mortgage

Mortgages can be a useful method for obtaining funds for new investments after a bankruptcy. However, be prepared to wait: generally, you can't get a mortgage until two years after a bankruptcy.

Thankfully, that should give you plenty of time to do the following:

  • Build your credit score above 640
  • Make payments on time
  • Pay for bills by check
  • Take care of other outstanding debts

If you have any more questions about getting over bankruptcy, talk to a bankruptcy attorney as soon as possible. They can help provide you with the information and guidance you need to recover.